Actually, Cato, McCain’s Health Care Plan Really Is That Bad

An analysis of John McCain’s health care plan by Cato Institute’s Michael F. Cannon argues that “Sen. McCain’s plan is a lot better than his critics suggest.” We disagree. Here’s why:

Cannon argues that, contrary to Elizabeth Edwards’ claim that McCain’s embrace of the private market wouldn’t secure coverage for people with pre-existing conditions, “the individual market covers lots of people with high-cost medical conditions — so long as they purchased the insurance when they were healthy.” Not only that, but “those high-cost patients do not pay premiums that correspond to their health risk, and their coverage does not disappear when they change jobs.”

But Cannon, in his enthusiasm to defend McCain, overlooks some important facts:

McCain’s Plan Would Weaken The Ability Of Sick People To Keep Their Private Insurance: The main reason (not mentioned by Cannon) that some people who develop health problems can renew their health insurance without seeing higher premiums is federal regulation through the Health Insurance Portability and Accountability Act (HIPAA). States have improved on these regulations, offering more protections to sick consumers of private health insurance, but John McCain, in his push for an unregulated national market, would undermine these additional protections.

McCain’s Plan For The Uninsurable Is Woefully Inadequate: While only 5% of non-elderly Americans participate in the individual insurance market, 56 million chronically ill people are currently covered by employer-based health insurance plans, which can absorb the cost of these high-risk individuals because their pools are diversified. McCain would eliminate the tax incentive to keep these plans active, and nudge many of these folks into the private market where insurers would be reluctant to cover them. McCain’s answer? Dubious “high-risk” pools. Cato’s answer? Thoroughlydebunked “Health Savings Accounts.”

There Are Better Alternatives That McCain Opposes: Cannon argues that McCain’s plan “provide more secure coverage of high-cost conditions than the current job-based system does” — but the way to provide the best security is a method which McCain adamantly opposes: offer a competing non-discriminatory, flexible alternative to employee based coverage by letting any American join a system like the one members of Congress use to get their insurance.

As the Des Moines register editorial board opined, McCain’s “dangerous experiment…should scare the heck out of the millions of Americans who rely on employer-based coverage.”